Osborne and Con-Dem alliance laugh at Britain as they take billions away from the needy

THE Chancellor was all smiles as he revealed a punishing squeeze of £4.5bn on the poor and vulnerable.

GEORGE Osborne and his ­cackling Con-Dem cronies seemed to find his latest attack on the poor and vulnerable a jolly good wheeze yesterday.

But critics slammed the ­Chancellor’s plans for three-year squeeze on benefits – costing the unemployed and low-paid £4.5billion in real terms.

In his Autumn Statement, he announced a one per cent cap on increases in income support, child benefit and housing benefit until April 2015.

That will be outstripped by inflation and plunge thousands of working ­families below the breadline, poverty campaigners claimed.

Judith Robertson, head of Oxfam Scotland, said: “Despite the ­Chancellor’s tough rhetoric on tax avoiders, it is once again the poorest and most vulnerable who are being made to suffer the most.

“This fresh round of benefit cuts will pull the rug from under the feet of those already on the edge of ­destitution.”

Osborne announced a £1billion raid on the pension pots of the rich and claimed that proved “We are all in it together”.

He reached out to motorists scrapped the 3p fuel duty rise due next month and handed tax cuts to lower and middle income earners.

But the Treasury’s own figures show that the average UK household will lose out next year. With the exception of those in the top 10 per cent, the poorest ­households face the biggest ­proportionate reduction in income.

Among payments hit are housing benefit claimed by 3.5million, income support claimed by 900,000, and jobseeker’s allowance paid to 1.6million.

Currently benefits go up in line with inflation but under the one per cent cap, a one-earner family on £20,000 with two children will lose £279 a year.

The cap on tax credits and child benefit will leave some working families £3000-a-year worse off by 2015, warned the Trades Union Congress.

An unemployed 23-year-old will see their jobseekers’ allowance rise by just 56p a week, or £29 a year, for the next three years.

Osborne insisted the cut in benefits was “fair” because working people’s pay had risen at half the rate of benefits since 2008.

Julia Unwin, of anti-poverty think tank the Joseph Rowntree Foundation, said: “The Government is giving with one hand, but taking away with the other.

“Snipping at the safety net and reducing the value of benefits at the same time will increase poverty and hardship for the most vulnerable. We’re at risk of consigning the poorest to a decade of destitution.”

STUC general secretary Grahame Smith said: “Whilst he may feel obliged to repeat the rhetoric, today is the day the Chancellor abandoned any pretence that we’re all in this together.”

Save the Children’s Douglas Hamilton said: “Despite the majority of children in poverty having parents in work, this winter many of them will still go without basic essentials – hot meals, decent winter clothing and a warm home to live in.

“In and out-of-work benefits won’t keep pace with increasing living costs and will push more ­families into poverty and make life far harder for those already there.”

In a huge embarrassment for the Government, Osborne was forced to admit that his economic strategy is failing miserably.

He confessed there is “much more to do” as he delivered his mini-budget against a backdrop of grim data revealing higher ­government borrowing and lower growth ­expectations. He faced up to the fact that he will not be able to pay off the nation’s structural debt until 2018, two years behind target.

Shadow ­Chancellor Ed Balls claimed Osborne had revealed the “true scale of this Government’s economic failure”. But Osborne won grudging praise for some measures. There will be a £12billion package to stimulate ­business growth and another cut in corporation tax.

A £5billion raid on Whitehall ­administration budgets will give the Scottish Government an extra £331million for their own projects. SNP Finance Secretary John Swinney said: “The Chancellor has finally heeded Scotland’s calls to boost capital spending.

“But these steps only take us half way in terms of investment and there is still a lack of a coherent plan to return the economy to growth.”